A Portland strip club hands out red-stained $2 bills, despite warnings from the feds to stop.

The manager at the McDonald’s on Northwest Yeon Avenue
glanced at the money in the customer’s hand, a $2 bill that looked as if
its edges had been dipped in blood. He grew tense, shook his head and
turned away.

“Oh, no,” he says. “We’re not allowed to accept those.”

McDonald’s
employees had seen the mystery money before—crimson-stained, smeared,
always $2 bills—as have food carts, bars, retail stores and other
businesses across the Portland area.

The bills have amused
some people and alarmed others, who aren’t sure if the stains come from
real blood, if the cash is counterfeit, or if the bills were marked by
an exploding dye pack during a bank robbery gone wrong.

Thousands of these
tainted bills are in circulation around the city, but their source is no
longer a mystery: They’re a marketing gimmick for Casa Diablo, a
Northwest Portland strip club that is taking U.S. currency and smearing
it with blood-red ink.

Casa Diablo has made
headlines in Portland for its vegan menu and its successful battle
against local opponents to open a second club on Southeast McLoughlin
Boulevard.

Johnny Zukle, the
club’s manager, says he’s the one red-inking the bills—which are legal
tender—to suggest they’re stained with blood. He says he wants the strip
joint to remind patrons of the vampire-infested cantina in the 1996
Robert Rodriguez film, From Dusk Till Dawn.

But the feds have
taken a dim view of Zukle’s actions: It’s against federal law to deface
U.S. currency with the intent to make it unusable.

WW has learned
Zukle and Casa Diablo are now under investigation by the Secret
Service. Jon Dalton,
resident agent in charge of the Secret Service’s Portland office, tells WW the fact the bills are being rejected show Casa Diablo’s inking of the money violates federal law.

Dalton says his
office has told Casa Diablo three times to stop handing out the tainted
bills. He also says his office has prepared a cease and desist order and
is consulting with federal prosecutors about criminal charges. (WW has also learned the FBI paid the bar a visit in February.)

But despite these warnings, Casa Diablo keeps doling out the blood-red money. A WW reporter last week was still able to get a stack of the $2 bills from the bar.

Casa Diablo uses $2
bills to encourage bigger tips for its dancers. Zukle says he orders the
$2 bills in bulk from his bank, Wells Fargo, then stains them with red
ink. He won’t say exactly how he does it. “Trade secret,” he says.

Zukle says what he’s
doing to money is protected as free speech, and he compares it to “Stamp
Stampede,” a campaign launched this year by ice cream kingpin Ben
Cohen, co-founder of Ben & Jerry’s, to put political messages on
currency. But Zukle says thanks to pressure from the feds, he will phase
out his inking of bills.

Zukle started dyeing
the bills in February. Casa Diablo dancers say Zukle wants to keep the
currency circulating inside the bar and only give change in the $2
bills.

“Either customers
love them or they say they don’t know what to do with them,” says Casa
Diablo dancer Erin Lee McCallum. “Sometimes they’ll just dump all the
twos on my stage.”

U.S. Bank spokeswoman
Teri Charest says her bank followed Federal Reserve orders this summer
to stop accepting the bills, but was told a week ago that it’s OK to
take them again.

Wells Fargo spokesman
Tom Unger says his bank’s area branches collect 600 of the bills each
day, and then ship them to the Federal Reserve Bank to be destroyed.

“We see them as unfit currency, so we don’t put them back into circulation,” Unger says.

Employees at other
bars and taverns say they’re getting stuck with the dyed currency,
unable to spend it or turn it in to their bank.

Amy
Snyder, a bartender at Portland strip clubs Sassy’s, Lucky Devil and
Devils Point, says she’s got $160 worth of the bills she received as
tips, and her bars no longer accept them.

Snyder says the bills force people to go back to Casa Diablo.

“The
$2 bills may be great advertising and a great moneymaking scheme for
the strippers and employees of Casa Diablo,” Snyder says in a Facebook
message to WW, “but for other bars in the industry, it may as well be Monopoly money.”